U.S. Denies Permit for Coal Terminal in Washington State

SEATTLE — The coal industry, shaken by dropping global demand and tighter air quality regulations, took another major hit on Monday when the United States Army Corps of Engineers said it would deny the permit for what could have been nation’s largest coal export terminal here in Washington.

The $665 million project, called the Gateway Pacific Terminal, was already hitting headwinds. The developer asked last month that the state environmental review on the project be delayed, citing “uncertainty and related costs.” And one of the largest potential suppliers of coal, Peabody Energy, filed for bankruptcy protection last month.

But in the end, the decision came down to fish.

The Lummi Nation of American Indians had said the terminal, about 90 miles north of Seattle, would threaten the tribe’s ancestral fishing rights, which are legally protected by treaties dating to the mid-1800s. Spills or maritime accidents, the tribe said, could permanently destroy fishing beds.

In its decision, the corps agreed, saying the developer’s plan to extend docks across 144 acres over the water could have restricted access to the water by the tribe. That concern was enough to stop the terminal, corps officials said, without even considering potential environmental harm.

“The corps may not permit a project that abrogates treaty rights,” said Col. John G. Buck, the corps’ Seattle District commander, in a telephone news conference. The project, Colonel Buck said, “is not permittable.”

The chairman of the Lummi Indian Business Council, Timothy Ballew II, called the decision “a win for the treaty, a win for the Constitution and a win for all of Indian country.” He added, “The ancestral sites will be protected.”

But a spokesman for the project called the corps’ decision “inconceivable.”

“Looking at the set of facts in the administrative summary, it’s quite obvious this is a political decision and not fact-based,” Bob Watters, the president of Pacific International Terminals, the Gateway proposal’s developer, said in a statement.

Environmental concerns about energy transport through the Northwest — both coal and oil — have grown in recent years as projects like the Gateway Pacific Terminal were put forward. Municipal leaders in cities from Spokane to Seattle said trains carrying coal from mines in Montana and Wyoming, or oil from North Dakota, posed risks: air pollution caused by dust, traffic congestion caused by mile-long trains and the potential catastrophe of derailments in urban areas.

But the economics of the market have spoken just as loudly.

Arch Coal, which was part of a team backing a big coal-export terminal on the Columbia River, filed for bankruptcy in January. A liquefied natural gas project proposed in Oregon was shelved last month, as was a methanol refinery plant in Tacoma, near Seattle. Mr. Watters said in his statement that the Gateway Pacific developers were considering “all action alternatives.”